No, the IRS requires that all income individual receives is reported on their tax return. The $400 you refer to is the limit under which a self-employed individual does not have to file self-employment taxes. Your friend has to report her income from babysitting on her tax return.
Babysitting income is self-employment income and should be included on your tax return. The IRS requires you to file if you had at least $400 in net earnings from self-employment (income minus expenses).
It's under $400 so she doesn't need to claim it right? I'm asking because she already filed with her husband (her $0 income and his income from his job) and I get $50 from my child care tax credit if I include it in my list of childcare expenses but I don't want her to get audited if I put her down and she hasn't claimed the income.
No, the IRS requires that all income individual receives is reported on their tax return. The $400 you refer to is the limit under which a self-employed individual does not have to file self-employment taxes. Your friend has to report her income from babysitting on her tax return.